HOW TO REGISTER A FOREIGN COMPANY IN KENYA: A COMPREHENSIVE GUIDE FOR GLOBAL ENTREPRENEURS
Introduction.
In the heart of East Africa, Kenya stands as a beacon of economic growth and innovation, attracting investors and businesses from around the world. If your looking to expand your enterprise into this dynamic market, understanding the process of registering a foreign company in Kenya is crucial. This guide simplifies the legal and administrative steps to help you navigate the process seamlessly.
Why Register a Foreign Company in Kenya?
Kenya’s strategic location, robust infrastructure, and investor-friendly policies make it an ideal hub for businesses targeting Africa. Registering your foreign company not only ensures compliance with local laws but also opens doors to a wealth of opportunities, including access to government incentives and a rapidly growing consumer base.
Foreign companies operating in Kenya are primarily regulated by the Companies Act, 2105. Under this Act, a foreign company is defined as a company incorporated outside Kenya but establishing a place of business within the country. The Act outlines the procedures and requirements for registration, ensuring transparency and legal compliance.
Additionally, other legislative frameworks impact foreign companies, particularly in terms of tax, labor and social compliance:
- Income Tax Act: Foreign companies are subject to taxation on income accrued or derived in Kenya. This includes corporate tax, withholding tax, and Value Added Tax (VAT) obligations. Registration for a PIN with the Kenya Revenue Authority (KRA) is mandatory for tax compliance.
- National Social Security Fund Act: This Act mandates all employers, including foreign companies operating in Kenya, to register their employees with the NSSF. Contributions to the fund are compulsory and ensure employees’ access to social security benefits such as pensions and retirement benefits.
- Social Health Insurance Act: Foreign companies must also comply with the provisions of this Act, which requires employers to contribute to the national health insurance scheme for their employees.
What are the requirements needed for registering a foreign company?
For registration of a foreign company, the following documents are required:-
- A certified copy of a current certificate of the foreign company’s incorporation or registration in its place of origin. The certificate of registration must be notarized or certified by the Registrar of Companies of that country.
- A copy of the National ID and passport photo of the company’s local representative – This is a major requirement needed since any foreign company seeking to set up a branch in Kenya must appoint a local representative who is of a Kenyan descent.
- A certified copy of the company’s constitution from its place of origin.
- A copy of the company’s Memorandum of Association.
- Recent colored passport photo(s) of the directors of the parent company.
- Identification documents of the directors of the parent company – Here, a passport bio data is recommended.
- Relevant documents relating to the nature of the business of the company.
- A minimum of three (3) to five (5) proposed names for the company
- Shareholder information of the shareholders of the company
- Foreign company’s address and that of the Directors (Telephone, postal address and physical address) of the company in Kenya
Procedure of Registering a Foreign Company in Kenya.
- Name Reservation.
The applicant is required to conduct a name search on the eCitizen portal to ensure the proposed company name is unique and available.
- Appointing a local representative and registering the office address.
The law requires foreign companies to appoint at least one Kenyan resident to act as a local representative to act as a local representative. This individual will be the point of contact for legal and administrative matters.
Further, the applicant will also be required to provide the physical address of the company’s principal place of business in Kenya. This must include the postal address and exact location.
- Lodging the Application.
The Registrar of Companies is responsible for business registrations in Kenya. Registration is done via the eCitizen portal. The documents required to accompany this application are;
- A certified copy of a current certificate of the foreign company’s incorporation or registration in its place of origin.
- A certified copy of its constitution.
- A list containing the names of its directors and shareholders and their personal details.
- A list of directors who resides in Kenya and directors who are members of a local board of directors.
- A memorandum that is duly executed by or on behalf of the foreign company and states the powers of those directors.
- A notice of address if it has in its place of origin a registered office for the purpose of a law there in force, or otherwise its principal place of business in its place of origin.
- Approval for the application.
The registrar approves the application for registration and registers the company by entering its name, a unique number and other particulars in the Foreign Companies Register.
- Issuance of Certificate.
The registrar issues to the company a Certificate of Compliance that states the name of the company, the unique number of the company, date of registration as a foreign company and the date of incorporation in its place of origin. A certificate is a conclusive evidence that the requirements relating to registration of a foreign company have been complied.
Conclusion.
Registering a foreign company in Kenya is a strategic step for any business aiming to tap into Africa’s vast potential. By adhering to the outlined procedures and ensuring compliance with local laws, you can establish a robust foundation for your operations in one of Africa’s most dynamic economies. With a clear understanding of the legal framework and post-registration requirements, your venture can thrive in Kenya’s ever-evolving business landscape.